Cancelled Insurance due to Hydronics-PGP

Paul Pollets

We were notified today that our insurance carrier-Ohio Casualty Group "is no longer insuring any contractor installing radiant/hydronic heating systems".

While we have never had any claims, I'm going to bet that the reason involves the defective work done on low budget systems. I'll follow up on any direct responses from Ohio Casualty. It won't be a problem to renew with another insurance company, but the writing is on the wall.

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jerry scharf_3

specific to the northwest

Paul,

Any guess whether this is specific to the northwest or whether it's nationwide.

jerry

Paul Pollets

Who knows??

I've several calls that have yet to be returned, so I have no idea.

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Mark Eatherton1

Industry trends...

We've changed insurers three times in the last three years and we too have had no claims. They're worried about their exposure and liability of having us install water in EVERY square foot of the peoples homes. That the reason we started using our limited volume make up, but it still doesn't keep them from jumping ship. Water = mold = liability. Plumbers, get ready...

ME

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don_91

Its nationwide.

I too was just cancel by OCG.I lived in the tidewater area of VA.

Best of luck to all,and let me just say it not only plumbers but they are starting to frown upon any one that does ac work as well.

Its not enough that we small business folks have to carry the tax burden of the country,now we got to look at high
insurance bills as well.

Please excuse me if I sound like a cry baby,but it stuff like this along with a not so level playing field that makes me want to throw in the towel.

Anybody hiring in VA.

bernie_3

Mark and Don are right.

My name is Bernie Riddle and am a lurker and learner on this very good website. I have also been in the insurance business for 23 years here in West Virginia.One of the big scares in the industry for the last 4 or 5 years has been mold exposure. It all started with a multi-million dollar lawsuit in Texas about 10 years ago. I had not had a mold claim for a customer until 2 years ago and I have had 2 since then. One was cleaned up for 60,000 and the other cost 40,000. And that was without lawsuits!!! My best advice is to look at your associations to see if they have marketing agreements with some insurance carriers that have a comfort level with this type of risk. That is usually the best route to take.
I have come to greatly respect the knowledge that is dispensed here and I have used some of it to aid my 70 year old boiler. I hope this advice will be a small repayment.

eleft_4

et,al.

How about not being able to change from a carrier who is "ripping" because your wife, in another business, had two robberies!

I was with the insurance co "we're on your side" for 20+ years and threatened to be dropped if I didn't agree by written affidavit to stop offering welding as a service in my business. Put in one claim. They sent out a brand new adjuster, his defense, reported the nail heads were rusty on the building collapsed from an unusually heavy wet snow, claim denied. Sued them, after three years, we, lawyer and I, settled for one third actual repair cost.

I wish you the best on this.

al

[Deleted User]

Travelers

refused to renew us last October. No work related claims for over 5 years. Agent said they were getting out of contractors insurance market. Sure different from the 90s, when they were knocking down the doors w/ bottom dollar quotes.

[Deleted User]

Travelers

refused to renew us last October. No work related claims for over 5 years. Agent said they were getting out of contractors insurance market. Sure different from the 90s, when they were knocking down the doors w/ bottom dollar quotes.

Paul Pollets

More...

It may also be related to radiant failure claims in the Seattle area or maybe the Heatway debacle. Hopefully, we can get the answers from the insurance carrier.

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Joe Brix

To make the insurance companies happy

Maybe if we ban all indoor plumbing, gas, electric and oil, they'll come around. So the new insurance model is pay high rates, and don't dare file a claim for anything. I'm in the wrong business.

Al Gregory

I have used Travalers for years. I hope I dont get one of those letters. I hate havingto shop for insurance. When they hear you install steam boilers they seem to get nervous

Mad Dog

Oh yeah its getting real rough out there

We were cancelled for "failing" to complete a telephone interview about our business that they wanted us to do every 6 months. Good thing I found the date time and person I talked too..otherwise we are outta luck. Frivilous lawsuits and insurance companies are ruining our industry and our country. It gets harder and harder to do legit business every day....the ones who are really making money are the unlicensed hacks and the moonlighters....no insurance, no license, no taxes, no worries. Mad Dog

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Mad Dog

The real crybaby's are the people who freak out

about mold, and non-friable asbestos in their homes. We had a customer a few months ago do the freak when we fired up the brand new boiler...you know how it can be a little smoky and smelly..: "is that normal is that toxic???" People have become real soft and are looking for the big lawsuit payday. Beware! Mad Dog

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Mark Hunt

They have to give you a reason


in writing.

PLEASE keep us informed.

Mark H

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Mark Eatherton1

It's like my pappy used to say...

A man's gotta lie cheat and steal just to make an honest living any more...

RIP Pappy:-)

ME

tim smith

insurance

Paul, can't imagine that a company would cancell you with no claims, You as well as I know that we are in the same boat. Hope you get it resolved. Good luck, tim.

Mark_7

insurance

The lawyer's cause all the problems. Check out Federated Insurance they write some good policies for heating,plumbing and oil companies.Website federatedinsurance.com

Ken D.

Insurance.

I have not heard from my carrier yet and am afraid to ask. I will say this; After almost 30 years in PHVACR, I have seen more mold in the air handler and ductwork of a single house than from any of the many hydronic systems I have seen. Thats not to mention the cruddy ice machines that never get serviced. There is something severely screwed up for an insurance company to dream this one up! Any adjuster wants to come around, I'll show them some mold that is not related to hydronics. They ought to get a life!

Paul Pollets

No Problemo

I've no problem finding another carrier. The issue is that commercial policies will become more difficult to obtain (and probably more expensive) with a hydronic "specialty".
It will be interesting to see the bigger picture for smaller contractors over the next 2 years. Most projects I work on require $2mil comprehensive coverage.

Mold, defective open systems,premature piping failures, bad design, budget systems, installer errors...whatever....all contribute to the pie. Mud pie.

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Mike T., Swampeast MO

You forgot to include "kill".

Scarlet O'Hara, "Gone With the Wind"

Firedragon_4

Although I agree

with everything here and love my own hydronic system, it's all about being in the minority.

94% of this country is heated by warm air (A/C), 6% hydronics. The warm air also takes in electric.

When there is an 'abnormal water discharge' resulting in 'expenses' for a carrier, they freak. Adjusters and actuaries then compare these losses to 'the national average'.

Most of the hydronics is installed in northern climates (makes sense to me) where freeze-up damages can run into hundreds and thousands of dollars in 'expenses'.

Much of the damage is considered by the adjusters and actuaries as preventable.

Improper Ph and freeze levels on anti-freeze, lack of system maintenance, poor workmanship, known or suspected faulty materials, boiler manufacturers with high defect rates, etc., etc.

Back to the minority. Although many cite 'mold' as the cause it's the smallest part of the problem when you're 'poor David'. Again, the loss analysts, actuaries and appraisers look at the claims, versus the market, and guess what?

Goliath (warm air) has problems too and we all know it, but they have the numbers, sic. Mold is a universal problem and the next thing on the horizon is 'chemical dusts'. Both of these are accelerated by air movement.

As an oilguy I'm terrified of all of this, since we have put so much of our past and future on hydronics. Why not, it's great stuff!

But again, we don't have the numbers and that includes our being in the minority again as a heating fuel, so now you take hydronics, couple it to fuel oil and oh boy!

Again, some analyst or actuary, right here for the most part, in the Northeast sitting in his cubicle looks over the numbers and ..............

I work for a lot of insurance carriers, sorry, we all have to make our daily bread and although I can jump up and down in a meeting, the bean counters rule, FACT!

A few years ago I warned about this and was told I was crazy and to go away. In typical fashion many attacked me as the messenger, unh-hunh!

Crazy I may be, but not stupid, no, no, no!

The best thing I have heard here is to have our own insurance company, but for poor Dan to start it up will be a herculian effort and the boys in Hartford, CT and elsewhere will fight you tooth and nail.

Instead you should form a group to purchase insurance as a block. If you do, then you will have power.

Until then, this is all hot air!

Sorry about that, I couldn't resist!

Hoppy Holiday!

bernie_3

form a group

I can appreciate your intentions but at least here in WVa it is illegal to form a group for the sole purpose of purchasing insurance. That is why I suggested in my prior post checking with your associations (both local and national) for insurance programs that they might offer to their members. Because they also provide many other benefits of membership it usually is the best choice. In addition if they are shopping for hydronics related contractors they will attract only those companies who have a comfort level with that type of risk. I carry part of my insurance agencies package through our state association and it is the best I can find. Hope this helps.

George_10

Could the RPA offer some form of coverage.

Sounds like it would be well worth while looking into

eleft_4

http://www.spectacle.org/797/finkel.html

PS

Target Practice

Start with the lawyers (first to be labeled hacks?) - then the media who hype threats like mold and glorify frivolous (but profitable) lawsuits - then the HOs who are looking for a jackpot - then a justice system that allows settlements instead of actually determining fault - then the insurance companies who don't do their "due diligence" - then ...

This is just the beginning ...

Firedragon_4

Amen Al,

but then we wouldn't have any politicians or insurance companies either, FACT!

Ken_8

While I too suspect lawyers are at fault...

The fact remains most charge nothing, take 1/2 or 1/3 and are content with that arrangement.

Logic would suggest, if there's no payoff for the litigators (lawyers) they would not work on percentage of awards basis.

Fact, there ARE awards and there are judgements!

Must we kill the lawyers and the jurors as well? And the judges? Must they all die?


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PS

Point is that it is a never ending cycle. And it's all about the $! These days it's never about fairness or determining the truth - just passing the buck! Insurance companies are taking it to the next level, though.

Relax. No one said anything about killing anyone - just suffer a little bit. Aim for their knees

Bob Harper

insurance crisis=tort law reform

The reason so many insurance companies are getting out of writing for contractors is frvolous litigation due to a lack of Tort Law reform. It can cost you a minimumof $5K to hire an expert to prove you were 100% correct even though a blind man could have seen it. I know of many cases where the homeowners were clearly advised IN DETAIL about certain hazards, situations, conditions, etc. yet they still sued when things went wrong. What else does a contractor have to do? Coinciding with this is an astronomical jump in premiums. We try to pass these on to consumers, which is inflationary.

Why won't Congress step in and fix this fiasco? Because Congress is made up of the same scumbag lawyers who are sucking the life out of this country. The chief source of revenue in the US pretty soon is going to be from litigation.
Shakespeare was right all along....

PS

You're right Bob - I forgot to include the "hacks" in state and federal government. While I generally abhor any government involvement - in this case they need to clean up the mess they started!

Ken_8

And...

use hollow points, preferably with .45 or larger diameter.

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Alan(CaliforniaRadiant)Forbes

Same here

We weren't dropped, but I had to give up my fire sprinkler license and we can no longer do residential new construction which includes additions. That leaves remodels and commercial work.

I love it when my insurance company tells me how to operate my business.

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Bob Harper

where this is going

Pretty soon the insurance companies will all be busted and so will we. The the damn lawyers will have to find someone else to suck the life out of. Of course the economy will be in ruins. Litigation kills the GNP of a country. It adds nothing only removing. The killers are and have been government, taxes, and litigation.

What we ought to do is drop our insurance, put that same money into the bank and become self-insured. For awhile, you won't be able to pull permits or get contracts but once nobody can, they'll have to relent. Take one claim: let's say you were negligent and a faulty joint caused $40K in actual water damages. If that tab could be amortized out over 30 years, your annual payments would be about $1,500 per year. So, take your premiums and pay off your home. If you screw up, take out a mortgage and pay it off. Better still, buy a rental property and use that to pay it off. You can write off the interest and depreciation, too. Beat the **** at their own game.

tommyoil

Radiators

Mike,
I know you've been looking for some specific rads. I dont recall the exact dimensions. I'm scrapping a bunch and am willing to take a look and give you a call tomorrow to see if I can be of any help. Do you have a # where I can reach you?? OR, if you like, you can give me a call on my cell @ 201 248 5032 after 10:00 am eastern time and I should have an answer for you. Its no problem for me if you are comfortable with that arrangement. Maybe I can help you out.
Tom(Tommy oil)Szymanski

hr

Doesn't the PHCC

have an insurance program for members? My wife tells me that this is a tough (association rates) thing to work out. I believe C-2000 tried. PSI tried, Ellen tried with Ben. Think it takes some pretty big membership numbers to even get carriers interested.

hot rod

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Weezbo

quite a few years ago it occured to me to ask if there were

re-insurance rates available in my neck of the woods...and to ask what other options are available to the contractor besides the companies that the insurance broker is currently dealing with...quickly he has lots of reasons why Not....i would like to hear a rational plan that is built around "can do"how many claims have been made against you?well if there havent been any...why wouldnt there be an insurer that would provide insurance ? to me the "Insurance industry" is a form of legalized strongarm robbery....all i have ever done is pay pay pay ..For What? when do they give me back my money for not having had any claims ?when do they reduce my rates substantially to reflect that obvious oversight on thier part?

Chris Hawthorne, CIC, CPCU, LIA

Response

I am a Massachusetts Insurance broker and instructor who specializes in working with Plumbing Heating Cooling contractors. Scott Milne asked me to comment on the on going coversation.

Many people are making good points yet there are a few things to consider.

1) Insurance carriers have changing appetites and always have. For years they will pursue an industry then suddenly turn and run. It is true in all industries and with all carriers and always has been.

2) Insurance brokers have contracts with the carriers they offer. In otherwords brokers do not have access to all carriers.

3) Most local brokers represent 3 to 5 carriers. So if one of those carriers is not hot on your industry, the broker despite best efforts may be in bad position. Many contractors use local insurance agent not knowing that they should be with a regional broker.

4) Regionals represent 30 - 40 carriers so they typically have multiple competitive solutions.

5) 2005 represents a better year for contractors than the last 5 years as the market is becoming much more competitve.

6) Contractors often fail to utiilize non-insurance risk transfer methods such as hold harmless and indemification agreements with their clients. When a client needs you they will sign these. It is a very good way to avert MANY claims and transfer the risk back to the homeowner.

7) It is very important that you and your broker review your GL insurance each year to see the exclusions section. Believe it or not some carriers will add exclusions that pertain to your very work and not point it out.

The insurance industry is always in a changing state and requires annual management as opposed to the past. Keep in mind insurance policies are contracts that are being pounded everyday in courtrooms through out the US. In otherwords they are evolving documents thanks to one attorney trying to get the best for their client at the time. In the end it effects us all. One person said lying and cheating is the way to survive these days. I disagree in that that will always give the insurance carrier a way out. The key is to know the market and what your options are. It is a big market and there are plenty of competitive options out there at this time.

I hope this is helpful.

Chris Hawthorne

Chris Hawthorne, CIC, CPCU, LIA

Input from Massachusetts

I am a Massachusetts Insurance broker and instructor who specializes in working with Plumbing Heating Cooling contractors. Scott Milne asked me to comment on the on going coversation.

Many people are making good points yet there are a few things to consider.

1) Insurance carriers have changing appetites and always have. For years they will pursue an industry then suddenly turn and run. It is true in all industries and with all carriers and always has been.

2) Insurance brokers have contracts with the carriers they offer. In otherwords brokers do not have access to all carriers.

3) Most local brokers represent 3 to 5 carriers. So if one of those carriers is not hot on your industry, the broker despite best efforts may be in bad position. Many contractors use local insurance agent not knowing that they should be with a regional broker.

4) Regionals represent 30 - 40 carriers so they typically have multiple competitive solutions.

5) 2005 represents a better year for contractors than the last 5 years as the market is becoming much more competitve.

6) Contractors often fail to utiilize non-insurance risk transfer methods such as hold harmless and indemification agreements with their clients. When a client needs you they will sign these. It is a very good way to avert MANY claims and transfer the risk back to the homeowner.

7) It is very important that you and your broker review your GL insurance each year to see the exclusions section. Believe it or not some carriers will add exclusions that pertain to your very work and not point it out.

The insurance industry is always in a changing state and requires annual management as opposed to the past. Keep in mind insurance policies are contracts that are being pounded everyday in courtrooms through out the US. In otherwords they are evolving documents thanks to one attorney trying to get the best for their client at the time. In the end it effects us all. One person said lying and cheating is the way to survive these days. I disagree in that that will always give the insurance carrier a way out. The key is to know the market and what your options are. It is a big market and there are plenty of competitive options out there at this time.

I hope this is helpful.

Chris Hawthorne

PS

Very informative post Chris. Since we've been picking on lawyers here - got any good insurance jokes?

Troy_3

Insurance

A fellow contractor told me he was cancelled and the reason given was that he had no claims in 20 years. Not any- so they figured he was overdue for a big one. Go figure.